Fashion hit hardest as 11,000 stores disappeared from high street last year says LDC
The grave state of physical retail, and fashion retail in particular, surfaced Wednesday as a report showed over 11,000 UK stores disappeared last year as the pandemic took its toll on high streets, shopping centres and retail parks. Darker still, a further 18,000 stores may close this year.
The report by the Local Data Company (LDC) showed fashion and clothing stores led the decline. The loss of commuters and tourists also hit city centres hard, with unit vacancies rising by 2.5 percentage points to 16.1%, higher than any other type of location.
The report said a net total of 9,877 chain stores and 1,442 independent retail, restaurant and leisure premises were shuttered permanently in England, Wales and Scotland in 2020. The analysis covered 680,000 retail units in 3,000 shopping locations.
Upsides were that beauty salons were among the fastest-growing sectors and that independent and village retailers fared far better than chain stores and city centres. The report said the slower pace of independent retail closures (11% compared to 2019) was helped by government support, which included grants and furlough payments for workers, business rates relief, a moratorium on evictions for those unable to pay landlords.
That helped ensured the pace of closures was not as bad as predicted by LDC, which had expected at least 14,900 retail units to be closed.
However, the report’s numbers fail to take into account that many outlets included in the research were temporarily closed during lockdowns and were not counted. So the true impact of the pandemic has yet to be included as many of those temporary closures may never resurface after restrictions are relaxed next month.
Up to 18,000 more stores, restaurants and leisure outlets could be vacated as the collapse of major retail groups including Debenhams, Topshop and Dorothy Perkins hits home, according to LDC.
The data also reveals the difficulties ahead in remodelling town centres to be less reliant on retail. Of the House of Fraser, Debenhams or Beales department stores that closed between January 2017 and December 2019, less than a quarter have found new occupiers without having to be reorganised into smaller units, it noted.
About 30% of the former department stores were either demolished or split into smaller units. LDC said a similar fate was likely to await a further 124 Debenhams stores, which closed at the end of last year but are not included in the 2020 data as many are expected to briefly reopen to clear stock this year before shutting permanently. This month, it was reported that former Debenhams stores in Leicester and Gloucester will be converted into homes and a tuition centre respectively.
Lucy Stainton, head of retail at LDC, said: “Our latest report shows a marked increase in the structural decline across the physical retail and leisure markets but we would also argue that we aren’t yet close to seeing the full impact of the Covid-19 pandemic.
“What remains to be seen are the consequences of government support ending, effectively ‘defrosting’ a significant portion of the market which has been frozen in time since the onset of the pandemic. With this in mind we would expect to see the state of play in terms of vacancy rates and net change worsening over the course of 2021 and 2022 before levelling out”.
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